Posted by: Amelia | June 7, 2007

The Gap Commences

Today the Harvard class of 2007 joins the ranks of educated women and men, as the traditional commencement incantation goes.  According to a Harvard Crimson study, however, those educated women will be working for significantly less pay than those educated men.  Crimson reporter Daniel Hemel reports the results of a survey of 901 seniors that showed a $10,000 gap in starting salaries for women and men:

The median first-year base salary for male members of the Class of 2007 is $60,000, compared to $50,000 for females, according to the survey results.

Part of the gap stems from the fact that males are more likely to enter lucrative sectors such as investment banking. Males also are more likely to graduate with degrees in economics, computer science, and other fields that are attractive to employers. But even controlling for industry sector and academic background, males appear to earn about 8 percent more than their female classmates, according to The Crimson’s analysis.

That last sentence is key, and I wish Hemel had elaborated on it further.  He later states that the salaries were equal within most sectors, so I wonder where the 8% gap is coming from.  Critics are quick to dismiss the pay gap as merely representing women’s choices: women choose lower paying professions, choose fields of study that are less marketable, choose to reduce work levels to raise a family, etc.  It’s true that these choices explain some of the gap.  But the Crimson study, like a recent American Association of University Women study of the pay gap at large, controls for those factors and still comes up with a disparity.

Well, that’s not entirely true: they just control for major and profession choice.  The motherhood factor is internally controlled for simply because of the sample itself.  If the Harvard class of 2007 is anything like my own class of 2005, the number of women who are mothers or are planning to become mothers immediately after graduation is about 0%.  So the salary gap must be to be due to other factors.  Harvard women are, indeed, choosing high-paying fields such as investment banking at half the rate of their male counterparts.  The males, on the other hand, are entering the low-paying public service sector at only a third of the rate of the women.  In most of these fields, the gap is negligible.  In others, though, the difference is stark.  “The gap between male and female wages is largest in the technology sector,” Hemel writes. “The median male salary in that industry is $74,000, compared to $50,000 for females.”

The tech sector gap is troubling, to say the least.  It’s hard to come up with a good explanation that doesn’t involve at least some discrimination.  But what to make of the different sector choices?  As someone with a strong belief in public service, I can’t really chastise women for choosing service and education.  Perhaps I can chastise men for not choosing public service.  I just wish there was a little more parity in the distribution, especially since the pay gap only exacerbates itself and increases as the graduating cohort continues on its career path.

Even with identical sector distribution, though, there could still be a gap if women simply get paid less for the same work – and lest we forget, it’s now awfully hard to fight that, thanks to the Supreme Court.  One thing that struck me about both Hemel’s article and the criticism of the Ledbetter v. Goodyear decision is that greater transparency and better knowledge could be an important remedy.  Hemel writes:

One of the economists who reviewed The Crimson’s data, Linda C. Babcock of Carnegie Mellon University, has found that men are more likely to negotiate their starting salaries, while women are more likely to accept their employer’s first offer. In a study of Carnegie Mellon business school graduates, Babcock found that 57 percent of men “asked for more”—while just 7 percent of women tried to negotiate.

The gender gap is narrowest in sectors that publicize information about starting salaries, according to research by Babcock and the Kennedy School’s [Hannah Riley] Bowles. “So, one thing that career services [at Harvard] could do to help diminish the gap is to provide students with good information about the appropriate compensation standards for the types of jobs they are negotiating,” Bowles wrote in an e-mail.

Likewise, critics of the Ledbetter decision cite the difficulties of knowing the salaries of similarly situated employees, given that such information is typically confidential.  And by critics, I also mean Ruth Bader Ginsburg, who pointed out exactly that in her dissent.  My mother always liked the phrase “know thyself,” which is a great sentiment.  But sometimes it pays to know thy competition as well.

Congratulations, women of ’07, and good luck in your lives and in your careers.  Never settle for anything less than you deserve.

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Responses

  1. Before reaching an opinion on discriminatory pay, I would want to know more about what kinds of jobs young women in the tech sector are taking, and whether they differ from the kinds of jobs men are taking. If there is little pay discrimination in other fields but women are more likely to enter lower-paying fields, perhaps they are similarly starting in lower-paying kinds of jobs within the tech sector. Even if they are, though, the reason could be their own choice or it could be the result of bias against them. Indeed, for any of the fields, do women “choose” them freely or are they subtly channeled away from some of the higher-paying fields and jobs–as they once were much more overtly channeled away from law, medicine, and finance?


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